The money was part of an investment of more than $90m (pounds 58m) pumped into Solve-Ex alone in breach of internal and City regulatory rules.

Morgan Grenfell sources indicated this weekend they had also not ruled out action against Fiba Nordic, the Scandinavian owned broker which introduced Solv-Ex to Mr Young and many of his other speculative high-techology investments.

This weekend investigators led by Ernst & Young were continuing their enquries following the sacking of Keith Percy, the head of Morgan Grenfell Asset Management.

Enquiries are understood to be looking further secret offshore companies set up by Mr Young. His Dutch wife, Harmanna, has also been drawn into the affair and is also now understood to be represented by Peters & Peters, Mr Young's City solicitors.

The bank is also looking at an alleged clique of overseas individuals in the affair and is co-operating with a Serious Fraud Office investigation.

Fresh details of Mr Young's activities emerged last week following a filing made by Deutsche Bank to the US Securities and Exchange Commission.

So far, the bank has kept most of its ammunition up its sleeve, declining to reveal the terms of a Mareva asset-freezing order gained against Mr Young when the scandal broke in September.

The filing had to be made under US law, however, and showed that it held 12.4 per cent of New Mexico-based Solv-Ex, which is developing technology to extract oil from tar sands.

A $91m investment was channelled through Luxembourg firms Alulux, Sandvest and Waferprod, via two new secret firms, Liechtenstein-based Phemex and Cayman-registered Silva.

Russ Oil - another firm which Morgan Grenfell alleges was set up to "divert money and opportunities" for Mr Young's own private benefit - also owns over a million Solv-Ex shares, which would take the holding to 16.8 per cent.

Examination of the terms of the final $33m loan shows them to be wholly uncommercial. Only $24.6m was actually advanced, with $4.3m of arrangement fees and advance interest going to Phemex and $2.1m in a 7 per cent commission to Fiba Nordic on this deal alone.

This weekend Solv-Ex chief executive John Rendall said he would hold Morgan Grenfell to the loan and fight attempts at recovery.

He said he had never dealt directly with Mr Young, but through Erik Langaker, a Fiba Nordic corporate financier, who has now left the broker. Mr Langaker, he said, was introduced by Campbell Deacon, the head of Toronto- based Deacon Barclays de Zoete Wedd.

Stephen Chance, Fiba Nordic's managing director, however, said the terms were negotiated by Swiss lawyers Wyler & Wolf who acted for Mr Young.

Investigators are also looking into a Mr Hans Ruedi Herzog, a director of Alulux and Sandvest, who is understood to be associated with Wyler & Wolf.

Suspicions of Mr Young's wife's involvement comes from the alleged opeartion of Silva on behalf of a Herman van Dalen, who bears his wife's maiden name. "We don't know who Herman is, or whether its a typo for Harmanna," one source said.

Mr Young has denied all allegations of impropriety, but neither he nor his wife could be contacted this weekend.